College: The Best (and Most Expensive) Years

Lots of debate has been circulating through the U.S. in recent years when it comes to college affordability. With the economy in recession, Americans still combating reduced or no income, and college graduates defaulting on student loan payments, many are pressing for more affordable education options.

All of this attention has left many high schoolers and their parents discouraged about their chances of affording a higher education. But before you write off college completely, it’s important to know the facts and figures regarding college affordability. Even if a private four-year university is out of reach, you may be surprised at the alternative options that are still within your financial range.

Quick Look at U.S. Tuition Costs

While there has been great debate about public schools increasing their costs, they continue to have the lowest tuition and fee costs. In many instances, these colleges and universities cost less than half of their private counterparts.

Of course, there are always schools that buck the trend, like Webb Institute in New York, where students are admitted with zero tuition costs. And there is still a large variance in tuition and fees from state to state and school to school, so take the extra time to look up the costs for each school that you’re considering. If you’re thinking about going out of state, you’ll want to be extra vigilant and take the time to scrutinize out-of-state tuition costs. Those extra couple of hours of research could really pay off, as you may find schools that waive the out-of-state costs for students due to geographic location, GPA or other factors.

Room and Board

Many families don’t realize that there can also be a great variance when it comes to room and board expenses. When researching tuition, be sure to factor in these expenses. You’ll also want to research the average local rent if you won’t be living on campus for the entire duration of your college career. Keep in mind that the apartments and rental houses that are closest to campus often come with the highest price tag. If you’ll have a car with you or if the town has a dependable public transit system, then you may want to consider looking beyond the college adjacent neighborhood for your new digs.

Qualifying for Aid and Student Loans

The good news is that the vast majority of college students qualify for student aid, with the percentage of students receiving aid actually higher at private universities, helping to offset the steep tuition that students face at those institutions.

Many other students also qualify for student loans, which traditionally have fairly low interest rates. There are quite a few options when it comes to loans, and it’s important to walk through all of the terms on the loan to ensure you have a firm handle on the costs involved in your college financing. In addition to the rates and any fees, you’ll want to inquire about the repayment timeline as some loans have deferred payments that don’t start until after graduation but other loans will require you to start making payments immediately.

FAFSA: Dependent vs. Independent

Most college students will be considered dependents when applying for financial aid, even if they live at a different address than their parents or guardians.

Because of this, many families decide to skip the process of filling out the FAFSA paperwork because they don’t think their student will qualify for aid. However, this can be a huge mistake as many private scholarship applications will require applicants to have completed the forms, even if the scholarship is not needs-based.

Full-Time vs. Part-Time Enrollment

Enrolling as a part-time student can be tempting as it provides students with a greater opportunity to earn income while attending school. However, before you register for your first semester, you’ll want to review your aid and scholarships. Many have stringent policies regarding the minimum number of units a student must take each semester/quarter to qualify for the awarded monies. Dip below that requirement, and you may lose your funding for the entire year.

Student Financial Responsibility

Taking on debt in the form of student loans and student credit cards is a huge responsibility. How you handle those accounts will be reported to the credit bureaus and will take a spot on your credit report. Depending upon how you handle those accounts, you can make either a positive impact or a negative impact on your credit score, which will be used by various lenders over the years as you apply for auto loans, personal loans, mortgages and credit cards.

If you think you’ll be tempted to overextend yourself with your newfound financial freedom, you may want to leave your credit card at home when you move away to college. Take the time to settle into your new environment and routine before you add the plastic back to your wallet. This will ward off the temptation to blow off some steam with a shopping spree that will create a mountain of stress down the road.

You’ll also want to seriously consider how much student loan debt you want to take on. Consider the career path you envision for yourself and starting salary for professionals in that industry. If the salary is one that will be a struggle to live off of, then you may face the possibility of defaulting on your loan payments, which will negatively impact your credit score.

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